Confidence in EU and US Govts and their full faith and credit seems to be wavering
Posted on 12/22/2025 7:38:46 PM PST by Brian Griffin
At the center of this debate lies approximately 210 billion euros ($246.42 billion) in Russian state assets .... The EU’s financial system has benefited for decades from a reputation for stability, predictability, and political restraint. Sovereign investors from Asia, the Gulf and the Global South have viewed European financial infrastructure as relatively insulated from geopolitical turbulence. The perception that sovereign reserves can be repurposed under political pressure threatens to erode that trust.
This is not a hypothetical concern. Efforts to diversify reserves, reduce exposure to Western financial systems and develop alternative clearing mechanisms have been accelerating for years. The frozen assets debate reinforces these trends by signaling that access to European financial institutions may be conditional and politically contingent. In the long run, this dynamic could weaken Europe’s financial influence
(Excerpt) Read more at dailysabah.com ...
Federal finances rely on Wall Street.
The finances of over a hundred million residents of the US rely on federal finances.
China will be happy to take the world’s deposits, no questions asked.
And guaranteed to be returned.
Who owns the freezer where the “frozen assets” are kept?
It’s complicated, but the answer to your question is maybe a surprise.
The freezer is owned by Euroclear, which is not an EU entity. It is a private bank, with shareholders. It operates under the jurisdiction of Belgium.
There has been a lot of “if we do this, then other countries with deposits might do something”. The council meeting outright failed and odds look pretty high that in that somewhat secretive meeting Euroclear informed them it’s not **might**. They were likely already told how far they can go (frozen) as opposed to outright spending it before the exodus of money *will* not **might** takes place.
Frankly, I thought the EU would force the whole thing to happen if the word were **might**. The fact they failed completely suggests it was no longer **might** but *will*.
People are not thinking about the next step upcoming. What happens if Russia were to conquer Ukraine entirely? Answer, all the accumulated debt becomes Russia’s. Can they refuse to pay? Probably, but that is not a return to normal commerce they would maybe prefer.
Rather, I think this matter compels them to leave some minor part of Ukraine unconquered, and that part retains the debt.
Why should this retired American even bother?
Just more good news for gold and silver, tbh.
You believe China’s “guarantees?”
“Why should this retired American even bother?”
The Chinese work harder than Americans.
Many foreigners are smarter than Americans.
What keeps America in the running?
Honesty: “Thou shall not steal.”
Read comment #2.
In a way I hope they do it just so they can show their untrustworthiness. The reason I don’t want them to do it is that it will be a lifeline for Zelensky and a cash infusion into his personal fortune. At the same time it will prolong the war. I think the fact that EU is willing to replace their own population with hostile Islamists shows that they would have no hesitation to kill as many Ukrainians as it would take to keep the war going.
“People are not thinking about the next step upcoming. What happens if Russia were to conquer Ukraine entirely? Answer, all the accumulated debt becomes Russia’s.”
Lol. That is the most idiotic legal concept I ever heard. The debt will be on idiots who bankrolled the Kiev’s regime. And they’d owe Russia a lot in reparations.
Sure, Europe buying US weapons and giving them to Ukraine is giving "cash" to Z. Okay
I think my phrasing was poor. If Ukraine is conquered then the government of Ukraine becomes pro Russian. That debt would remain. It would be a burden on the pro Russian government.
And given the Ukraine would have no revenue, the funding for that government would be coming from Moscow. Demands for payment by the creditors can be ignored, but the interest will continue to accumulate.
A fundamental truism would unfold. There is no such thing as sovereign default. A country that owes money continues to owe money even if they declared default. The creditors have to agree to reduce the debt for it to be expunged.
Just happened in Argentina and to an oblique extent, Greece too. There is no sovereign default. That cannot disappear from a country’s balance sheet unless the creditor agrees because there is no such thing as a sovereign bankruptcy Court, and empowered to expunge debt.
The Euro’s seem to have dodged this issue for now.
Why can’t the Euro’s legislate asset seizure only being permissible in a few certain cases:
1) Massive fraud involving the assets.
2) Attempt to annex land of another country by military force.
And so on - in each case, the EU will have to decide on the effects of such rules on potential investment money vs. encouragement of good behavior. Then stick to those guidelines.
??
Consider the Wall Street example. If Dave commits fraud on Wall Street, is found guilty / fined, and the fine is greater than cash he can come up with, his assets (at least to make up the difference) after due process can be seized, no?
As aside, I was looking at some estimates of cost of this war including “future fallout”, economic disruptions, lost or displaced productivity, etc., out to around 2035 or so, a few days ago. Nobody seemed to really have a comprehensive answer (I should have saved some links anyway!), but I’d guess the total cost to Europe (including Ukraine) will easily exceed $5 trillion, and will probably go over $10 trillion — if it ends this year.
As former President Eisenhower said, “It’s an expensive business.”
Confidence in EU and US Govts and their full faith and credit seems to be wavering
Why will the pro-Russian government recognize the debts of prior regime? Why shouldn’t it have an income? Check out the history of post-Cold war Ukraine. Its economy was booming under the neutral governments, but nosedived under pro-Western coupsters.
Sovereign debt is very tricky. You can announce that you don’t recognize it and you have defaulted, but the creditor does not have to agree. It can seize assets, like ships on the high seas. This happened to Argentina.
As for having an income I was referring primarily to the transit fee of gas to the pipelines from Russia to Europe. Europe can refuse a price that has the transit fee built in.
What would a post war, pro Russian, Kiev government budget look like? It relies on Transit fee for revenue. It certainly will have taxes on businesses and people, but the spending obviously we’ll have to overwhelm that in order to pay for repairs.
Ukraine population was also in decline long before 2014. A declining population is not the formula for reduction of deficit.
The end of regime is the end of debt. Particularly if it become a part of Russiaand the debt was used against Russia. It will become a part of war reparations. Although I don’t believe that Ukraine will disappear compeltely. There will be a rump state in Galicia or a government in exile in Warsaw or London. Creditors will be free to sue them.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.